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European Session – Greece headlines and mixed US data cause volatility

Greece continues to be the main focus of the markets today, causing volatility as an agreement with Greece’s creditors remains elusive.
Greek officials resumed debt discussions in Brussels today after a failed meeting on Wednesday, while EU leaders will also convene today for an emergency two-day summit.

Meanwhile, the only concrete and positive news so far on Greece was that the European Central Bank approved the amount of emergency funding (ELA) that the Greek central bank requested for Greek banks in order to keep them afloat.

Various headlines on Greece throughout the day caused whippy moves on the euro as it dipped against the dollar to 1.1152 but mainly maintained a small range around the key 1.1200 level.

As many deadlines have been created and extended for a Greek bailout deal, the ultimate deadline remains for June 30 which is when Greece’s 1.6 billion euro IMF payment is due. The main sticking points that are holding up a deal are in the areas of taxation and spending cuts.

While Greece was the dominant theme today, focus shifted to US economic data releases as the US session came around.

The first batch of data was on initial jobless claims and personal spending, followed by flash services PMI.

The data was mixed which ultimately led to a weaker dollar. The number of Americans filing new jobless claims rose 3,000 to a seasonally adjusted 271,000 for the week ending June 20 while the US services sector grew at a slower pace for a third straight month in June. The flash services PMI index fell to 54.8 from a final reading of 56.2 in May, which was below expectations for a 56.7 reading. Only US personal spending data had a bright spot as it showed the biggest gain in almost six years in May as purchases rose 0.9% after rising 0.1% in April.

The dollar initially jumped on the personal spending numbers but then was weighed back down by the disappointing services PMI data. Overall the greenback had a volatile European session, trading between 123.31 and 123.79.

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